Upjohn Press Upjohn Research home page 1-1-1992 Banking the Furnace: Restructuring of the Steel Industry in Eight Countries Trevor Bain University of Alabama Follow this and additional works at: https://research.upjohn.org/up_press Part of the Industrial Organization Commons Citation Bain, Trevor. 1992. Banking the Furnace: Restructuring of the Steel Industry in Eight Countries. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/ 9780880995399 This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License. This title is brought to you by the Upjohn Institute. For more information, please contact [email protected]. Restructuring of the Steel Industry in Eight Countries Trevor Bain University of Alabama 1992 W.E. UPJOHN INSTITUTE for Employment Research Kalamazoo, Michigan Library of Congress Cataloging-in-Publication Data Bain, Trevor. Banking the furnace : restructuring of the steel industry in eight countries / Trevor Bain. p. cm. Includes bibliographical references and index. ISBN 0-88099-128-3. ISBN 0-88099-127-5 (pbk.) 1. Steel industry and trade. 2. Collective bargaining Steel industry and trade. 3. Corporate reorganizations. I. Title. HD9510.5.B25 1992 338.4*7669142 dc20 92-18358 CIP Copyright 1992 W.E. Upjohn Institute for Employment Research 300 S. Westnedge Avenue Kalamazoo, Michigan 49007 THE INSTITUTE, a nonprofit research organization, was established on July 1, 1945. It is an activity of the W.E. Upjohn Unemployment Trustee Corporation, which was formed in 1932 to administer a fund set aside by the late Dr. W.E. Upjohn for the pur pose of carrying on "research into the causes and effects of unemployment and mea sures for the alleviation of unemployment." The facts presented in this study and the observations and viewpoints expressed are the sole responsibility of the author. They do not necessarily represent positions of the W.E. Upjohn Institute for Employment Research. Cover design by J.R. Underbill. Index prepared by Shirley Kessel. Printed in the United States of America. ACKNOWLEDGMENTS The genesis of this project was a sabbatical semester in Europe during the fall of 1982, with assistance from the Carl Duisberg Society. At that time Bob Aronson, Bob McKersie and Lloyd Ulman encouraged me to pursue a com parative study of steel industry restructuring at the shop-floor level. Continued financial support was provided by the John R. Miller Professorship, the Uni versity of Alabama©s Research Grants committee, and the College of Com merce and Business Administration. Subsequently, financial support received from the W.E. Upjohn Institute for Employment Research allowed me to greatly expand the scope of the research, and finally, the Rockefeller Founda tion scholar©s program in Bellagio, Italy provided the uninterrupted time to complete a first draft I am particularly grateful to a legion of union officials, industrial relations managers, government officials, works council members, and academics who gave freely of their time in each country and provided me with most of the material for this monograph. They taught me something about comparative labor relations and cheerfully read drafts of earlier papers. I have been fortunate to have a group of able graduate assistants who aided in the research. I thank Martin Abercrombie, Edwin Arnold, Cathy Blakeslee, Jana Kuzmicki, Chris Lowery, Jim Simpson, Meera Venkatachalam, and par ticularly David Williams, who wrote the Fairfield Case. While my research was in progress, I discussed the findings in seminars at Cornell University and the University of California Los Angeles. I am grate ful to Roy Adams, TV. Eason, Robert Flanagan, K.M. Jackson, Herbert Mor- ton, Hans Mueller, Keith Sisson, and John Windmuller, all of whom reviewed sections of the first draft. Several members of the Upjohn Institute provided support. Allan Hunt shepherded the entire project, Lou Jacobson read the entire first and second drafts and provided numerous suggestions that pushed me to sharpen the analysis, and Judy Gentry lent editorial assistance. Several drafts of the text were processed by an able department staff, includ ing Mary Burnett, Lucille Maranda, Lisa Patrick, Margaret Perdue, and Mary Jane Taylor. They are the only people in the world who can read my handwrit ing. Finally, I owe the greatest debt to my wife Helena, who often waited beyond reason for me in some city while I concluded just one more interview and then proceeded with enthusiasm to introduce me to other aspects of each culture. 111 THE AUTHOR Trevor Bain is John R. Miller Professor and Director of the Human Resources Institute in the Manderson Graduate School of Business, University of Ala bama. He received his BA from the City College of New York, M1LR from Cornell University, and Ph.D. from the University of California Berkeley. He has held teaching appointments at Queens College of CUNY, the Univer sity of Michigan, and the University of Arizona. Professor Bain©s primary research interests have focused on restructuring and technological change, public employment programs, scientific and technical manpower, and comparative labor relations. He has published extensively in such journals as Industrial Relations, Academy of Management Review, Columbia Journal of World Business, and Kyklos. He is the recipient of research awards from many organizations, including the U.S. Department of Labor, the National Science Foundation, the Ford Foundation, and the Rock efeller Foundation. Professor Bain is also an active arbitrator. CONTENTS 1 Introduction................................................ 1 2 Restructuring in Eight Countries ............................. 13 Adversarial Systems......................................... 15 Canada................................................. 15 Great Britain ............................................ 17 United States............................................ 19 Cooperative Systems ........................................ 24 Belgium and Luxembourg.................................. 24 Germany ............................................... 28 Japan .................................................. 32 Sweden ................................................ 35 The European Economic Community ........................... 38 Conclusions ............................................... 49 Notes .................................................... 52 3 Collective Bargaining in Adversarial Countries ................. 55 Canada................................................... 55 Great Britain............................................... 57 Worker Directors......................................... 62 United States .............................................. 67 The Fairfield Works ...................................... 71 Conclusions ............................................... 82 4 Collective Bargaining in Cooperative Countries................. 85 Belgium and Luxembourg .................................... 85 Germany.................................................. 90 Japan..................................................... 99 Sweden.................................................. 101 Conclusions .............................................. 108 Notes ...................................................111 5 Employment Adjustment................................... 113 Adversarial Systems........................................ 113 Canada................................................ 113 Great Britain ........................................... 117 United States........................................... 123 Cooperative Systems ....................................... 130 Vll Belgium and Luxembourg................................. 130 Germany .............................................. 138 Japan ................................................. 146 Sweden ............................................... 152 Conclusions .............................................. 159 Notes ................................................... 161 6 Conclusions .............................................. 163 References ................................................. 173 Index...................................................... 183 Vlll TABLES 1.1 Crude Steel Production in Eight Countries, 1970-1990.............. 4 1.2 Total Employment in Steel in Eight Countries, 1970-1990........... 6 2.1 Common Market Steel Industry Quotas by Country............... 41 2.2 EEC Steelworker Reductions by Type, 1980-1988................ 42 2.3 Social Fund Commitments for Steel in the Four EEC Countries, 1973-1985.............................. 46 2.4 EEC Readaptation Aid for Steel, 1954-1983..................... 48 2.5 Income Maintenance for Steel in EEC Countries 1954-1990 ........ 50 3.1 Fairfield Employment and Restructuring, 1955-1984.............. 76 4.1 Reductions in Employment Under the Claes Plans................ 87 4.2 OxeU>sund City and Plant Employment, 1957-1983.............. 106 5.1 Stelco Hourly Employment, 1975-1986 ....................... 115 5.2 Belgium Steel Employment, 1974-1983 ....................... 132 5.3 Luxembourg Blue-Collar and White-Collar Notification Requirements and Severance Pay............................ 135 5.4 Arbed Steel Employment, 1972-1983 ......................... 136 5.5 Nippon Steel Employment, 1970-1989 ........................ 148 5.6 Employment Reduction Plans for Five Japanese Companies ....... 151 5.7 SSAB Steel Group Employment, 1980-1986 ................... 154 5.8 SSAB Early Retirement